Direct answer
The Bank of England is widely expected to raise Bank Rate from 3.75% to 4% on Thursday, November 5, 2026. That would be the first rise in borrowing costs since August 2023. This is an expectation, not yet a decision. The Bank will announce its actual decision on November 5.
What happened
Traders in financial markets widely expect rates to rise to 4% from 3.75% when the Bank’s Monetary Policy Committee announces its next decision on Thursday, November 5, according to PA reporting on November 1, 2026.
Pressure on the committee has grown since official figures showed Consumer Prices Index inflation rose to 3.5% in September, the highest level in 11 months, up from 3.1% in August. That is well above the Bank’s 2% target.
The conflict in the Middle East has helped push inflation further from target, with a surge in petrol and diesel prices a major driving force, PA reported. Inflation is also expected to be pushed higher this winter after Ofgem’s energy price cap rose by 3.6% for a typical household on October 1 and is forecast to jump by a further 22% in January.
A Reuters poll of 63 economists, conducted between October 12 and 14, found that 54 expect the Bank to increase rates from 3.75% to 4% on November 5. That marks a sharp change from September, when around 90% expected rates to remain unchanged for the rest of 2026.
Markets are fully pricing in a November rise, according to Reuters reporting on October 29, with a second hike fully priced in by February. Financial markets are pricing in around four quarter point rises by the end of 2027 in some forecasts, although economists are more cautious about what follows November.
The Bank held Bank Rate at 3.75% on September 17, 2026, by 6 to 3, with the same three members voting for 4%. The November decision is due at 12 noon UK time, alongside the minutes and the quarterly Monetary Policy Report.
Other recent data point in the same direction. The UK economy unexpectedly grew by 0.1% in August, suggesting resilience despite pressure on consumer spending. The unemployment rate fell to 4.7% in the three months to August, the lowest level in more than a year.
Suren Thiru, chief economist for the Institute of Chartered Accountants in England and Wales, said an interest rate rise to 4% looks all but certain, and would likely be viewed as a precautionary hike to contain price pressures. Ellie Henderson, an analyst for Investec, said many committee members’ patience with the recent rise in inflation has worn thin.
Why it matters for beginners
Bank Rate is the Bank of England’s main tool for influencing borrowing costs across the UK economy. It is not the exact rate any one person pays on a mortgage or a loan, but banks often move their own lending rates in the same direction when Bank Rate changes.
When inflation stays high, a central bank may raise rates to slow spending and cool price rises. That can help bring inflation down, but it also makes borrowing more expensive for households and businesses. That is the trade-off in this story.
For beginners, three points matter most. First, higher rates do not only affect new borrowers. Existing variable rate borrowers can see repayments rise. Second, savers may benefit from higher interest on savings, but that does not cancel out higher borrowing costs for people with large loans. Third, a rate rise is not a guarantee that inflation will fall quickly. It is a step the bank takes to try to bring inflation back toward its target over time.
For the UK housing backdrop, see our earlier post on UK house price growth slowing to 0.5% in October.
What to watch next
First, watch the actual Bank of England decision on November 5. An expectation is not a decision, and the Bank could still hold, even though markets and most economists in the Reuters poll expect a rise.
Second, watch the new Monetary Policy Report and the minutes, due with the decision. They will show how the committee sees inflation, growth, and the path for rates.
Third, watch what the Bank says about what comes after November. There is less agreement on further rises. In the Reuters poll, 30 of 61 economists asked expected another rise in the first three months of 2027, while others expected a hold after November.
Fourth, watch winter energy prices and the January price cap. If energy costs push inflation higher, pressure for further rises could grow. If inflation cools, the case for a pause could strengthen.
Frequently asked questions
Has the Bank of England already raised rates to 4%?
No. As of November 1, 2026, Bank Rate is 3.75%. A rise to 4% is what markets and most economists in the Reuters poll expect on November 5, not a decision that has already happened.
Why do markets expect a rise now?
Because September inflation rose to 3.5%, the highest in 11 months and well above the Bank’s 2% target, helped by higher petrol and diesel prices. A Reuters poll found 54 of 63 economists expect a quarter point rise on November 5.
What is a basis point?
One basis point is one hundredth of a percentage point. A 25 basis point rise is therefore a rise of 0.25 percentage points, for example from 3.75% to 4%.
What does Bank Rate mean for a normal household?
It influences borrowing costs. If lenders pass a rise on, mortgage and loan costs can go up, while savings rates may also rise. The exact impact depends on the loan, the lender, and whether the rate is fixed or variable.
Is this financial advice?
No. This post explains a rate expectation in simple terms. It is educational only, and it does not recommend any investment, loan, or financial decision.
Sources
PA, Bank of England expected to raise interest rates for first time since 2023, November 1, 2026: https://www.gazetteherald.co.uk/news/national/26687799.bank-england-expected-raise-interest-rates-first-time-since-2023/
Reuters poll, BoE to hike interest rates by 25 bps to 4% in November, October 15, 2026: https://www.fxstreet.com/news/boe-to-hike-interest-rates-by-25-bps-to-4-in-november-reuters-poll-202610150945
This article is for general information and education only. It is not legal or financial advice.